Fair Value Measures (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Schedule of assets and liabilities measured at fair value on a recurring basis

The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018, aggregated by the level in the fair value hierarchy within which those instruments fall (in thousands):

	Level 1		Level 2			Level 3		Balance as of March 31, 2019
Assets:
Derivative assets	$	—	$	360		$	—	$	360
Investment in Cole REITs	—		—			7,552		7,552
Total assets	$	—	$	360		$	7,552	$	7,912
Liabilities:
Derivative liabilities	$	—	$	(11,286	)	$	—	$	(11,286	)
	Level 1		Level 2			Level 3		Balance as of December 31, 2018
Assets:
Derivative assets	$	—	$	544		$	—	$	544
Investment in Cole REITs	—		—			7,844		7,844
Total assets	$	—	$	544		$	7,844	$	8,388

Reconciliations of the changes in liabilities with Level 3 inputs

The following are reconciliations of the changes in assets and liabilities with Level 3 inputs in the fair value hierarchy for the three months ended March 31, 2019 (in thousands):

	Investment in Cole REITs
Beginning balance, January 1, 2019	$	7,844
Unrealized loss included in other income, net	(292		)
Ending Balance, March 31, 2019	$	7,552

The following are reconciliations of the changes in assets and liabilities with Level 3 inputs in the fair value hierarchy for the three months ended March 31, 2018 (in thousands):

	CMBS (1)			Investment in Cole REITs
Beginning balance, January 1, 2018	$	40,974		$	3,264
Total gains and losses
Unrealized loss included in other comprehensive income, net	(837		)	—
Realized loss included in other income, net	(34		)	—
Unrealized gain included in other income, net	—			5,102
Purchases, issuance, settlements
Return of principal received	(4,402		)	—
Amortization included in net income, net	40			—
Sale of investments	—			(522		)
Ending Balance, March 31, 2018	$	35,741		$	7,844

(1)

During the year ended December 31, 2018, the Company repaid or sold all of its commercial mortgage-backed securities (“CMBS”). Prior to the repayment or sale, the Company’s CMBS were carried at fair value and were valued using Level 3 inputs.

Reconciliations of the changes in assets with Level 3 inputs

The following are reconciliations of the changes in assets and liabilities with Level 3 inputs in the fair value hierarchy for the three months ended March 31, 2019 (in thousands):

	Investment in Cole REITs
Beginning balance, January 1, 2019	$	7,844
Unrealized loss included in other income, net	(292		)
Ending Balance, March 31, 2019	$	7,552

The following are reconciliations of the changes in assets and liabilities with Level 3 inputs in the fair value hierarchy for the three months ended March 31, 2018 (in thousands):

	CMBS (1)			Investment in Cole REITs
Beginning balance, January 1, 2018	$	40,974		$	3,264
Total gains and losses
Unrealized loss included in other comprehensive income, net	(837		)	—
Realized loss included in other income, net	(34		)	—
Unrealized gain included in other income, net	—			5,102
Purchases, issuance, settlements
Return of principal received	(4,402		)	—
Amortization included in net income, net	40			—
Sale of investments	—			(522		)
Ending Balance, March 31, 2018	$	35,741		$	7,844

(1)

During the year ended December 31, 2018, the Company repaid or sold all of its commercial mortgage-backed securities (“CMBS”). Prior to the repayment or sale, the Company’s CMBS were carried at fair value and were valued using Level 3 inputs.

Summary of impairment charges by asset class

The following table presents the impairments by asset class recorded during the three months ended March 31, 2019 and 2018 (dollar amounts in thousands):

	Three Months Ended March 31,
	2019		2018
Properties impaired	24		12
Asset classes impaired:
Investment in real estate assets, net	$	11,988	$	6,043
Below-market lease liabilities, net	—		(7		)
Total	$	11,988	$	6,036

Fair value, by balance sheet grouping

The fair values of the Company’s financial instruments are reported below (dollar amounts in thousands):

	Level	Carrying Amount at March 31, 2019		Fair Value at March 31, 2019		Carrying Amount at December 31, 2018		Fair Value at December 31, 2018
Liabilities (1):
Mortgage notes payable and other debt, net	2	$	1,928,777	$	1,932,747	$	1,933,209	$	1,961,496
Corporate bonds, net	2	2,646,079		2,708,761		3,395,885		3,368,928
Convertible debt, net	2	399,076		402,017		398,591		396,905
Credit facility	2	1,095,000		1,094,984		403,000		403,000
Total liabilities		$	6,068,932	$	6,138,509	$	6,130,685	$	6,130,329

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(1)

Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs.